PL Town Hall Pty Ltd v The Trust Company Ltd

[2021] NSWCA 188

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	PL Town Hall Pty Ltd v The Trust Company Ltd [2021] NSWCA 188
Hearing dates:	23 August 2021
Decision date:	23 August 2021
Before:	Leeming JA at [1], [18]; McCallum JA at [17].
Decision:	Summons seeking leave to appeal filed 10 May 2021 dismissed with costs.
Catchwords:	APPEALS - leave to appeal - interlocutory orders - challenge to terms of interlocutory regime permitting tenant to recover goods from premises after conclusion of lease - pending proceedings seeking final relief - whether utility in grant of leave - whether tenant had failed to comply with earlier regimes - leave refused
Cases Cited:	PL Town Hall Pty Ltd v The Trust Company Ltd [2021] NSWSC 391
Category:	Principal judgment
Parties:	PL Town Hall Pty Ltd (Applicant) The Trust Company Ltd (Respondent)
Representation:	Counsel: D Allen (Applicant) D Weinberger (Respondent) Solicitors: Darby Jones Lawyers (Applicant) Squire Patton Boggs (Respondent)
File Number(s):	2021/00130389
Publication restriction:	Nil
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2021] NSWSC 391 Date of Decision: 19 April 2021 Before: Slattery J File Number(s): 2021/00088445

EX TEMPORE Judgment

1. LEEMING JA: The applicant, PL Town Hall Pty Ltd, trading as Priceline, operated a pharmacy business from premises owned by the respondent. It failed to pay monthly rent for some months in 2020. It received a notice of termination of the lease on 17 February 2021. It commenced proceedings seeking relief against forfeiture. Those proceedings were resolved by a consent regime made on 3 March 2021 which required the payment of a sum of money within seven days in exchange for possession continuing.

2. The orders constituting that regime were as follows:

"1. ORDER that the plaintiff deliver possession of the premises known as Shop G54 Citigroup Centre, 2 Park Street Sydney NSW 2000 (Premises) to the defendant forthwith.

2. ORDER that the proceedings be dismissed with no order as to costs without prejudice to such, if any, rights and obligations the parties may have against one another in relation to due performance of the plaintiff's lease.

3. NOTE that the defendant gives to the Court an undertaking not to take possession of the Premises by re entry before 30 June 2021 if the plaintiff:

a. Provides the defendant with a bank guarantee in the sum of $88,150.58 on substantially the same terms as the bank guarantee under the lease within 7 Days (with an expiry date of no earlier than 30 September 2021).

b. Pays the defendant $88,150.57 on 10 March 2021.

c. Pays the defendant $88,150,57 on 1 April 2021.

d. Pays the defendant $88,150,57 on 1 May 2021.

e. Pays the defendant $88,150,57 on 1 June 2021.

f. Vacates the Premises on or before 30 June 2021.

4. NOTE that the intention of notation 3 is that in the event that the plaintiff defaults in respect of any of (3)(a)-(f), the defendant will be entitled to take possession of the premises forthwith.

5. NOTE that it is agreed between the parties that their intention is that the plaintiff will deliver possession of the Premises to the defendant no later than 30 June 2021.

6. NOTE that it is also agreed between the parties that, whether or not the plaintiff remains in possession of the Premises until 30 June 2021, it is contractually obliged to provide the bank guarantee referred to in (3)(a) and to make the payments referred to 3(b)-(e) inclusive.

7. NOTE that the defendant's rights in respect of rental arrears and otherwise generally are reserved, as are the plaintiff's defences, if any.

8. RESERVE to the parties liberty to apply for such, if any, orders as may be necessary in the working out of the orders and the agreement referred to in these notations and orders."

3. One of the payments referred to in order 3 was made but the bank guarantee was not provided within the seven days contemplated. On 11 March 2021, Priceline was locked out of the premises. Priceline applied to the Duty Judge on 12 March 2021 but the application was refused. There is no application for leave to appeal from either the orders made on 3 March or those made on 12 March 2021.

4. On 29 March 2021, Priceline commenced further proceedings. Those proceedings remain undetermined. By way of further interlocutory relief, the primary judge sitting as Duty Judge heard an application on 15 April 2021 and delivered substantial reasons of 82 paragraphs on 19 April 2021: PL Town Hall Pty Ltd v The Trust Company Ltd [2021] NSWSC 391. Notwithstanding those reasons, there was a further dispute as to orders which his Honour resolved on 21 April 2021, giving supplementary reasons.

5. Essentially, his Honour granted Priceline access to the premises over a period extending until either 30 April or 7 May 2021 for the purposes of recovering stock and other business assets, on terms that Priceline pay amounts of money representing one month’s rent (rather than the two months outstanding) together with an amount to pay for security guards to be present while the pharmaceutical products were being moved.

6. Priceline is dissatisfied with that regime and seeks leave to appeal. However, some four months have now elapsed. Priceline has not sought any interlocutory relief in this Court in support of its appeal.

7. It is significant to bear in mind the practical consequences that if there were a grant of leave, there would likely be a hearing of the appeal in the latter months of this year with the possibility of a judgment before the end of this year, but equally with the possibility of no judgment until early next year, some 12 months after the notice of termination of the lease had been received. It is also important steadily to bear in mind that this application for leave to appeal concerns the interlocutory regime by which the former tenant seeks equitable relief in relation to its chattels left in the demised premises pending the determination on a final basis of its claim.

8. The materials accompanying the application for leave are decidedly thin. They disclose nothing about what has occurred in the main proceedings over the last four months. However, it seems that on 10 May 2021 Priceline advised it would serve an amended statement of claim, and that that has occurred. The Court has been told that the relief is identical to that sought before Slattery J by way of interlocutory relief, namely relief for detinue and conversion, together with damages. The Court has also been told that, most recently, the respondent has filed an application for security for costs, which remains undetermined, but is expected to be determined in the next few weeks or, possibly, months.

9. The parties debated before us, as they did before the primary judge, whether reasonable notice had been given by the respondent prior to its taking possession. The applicant maintained that it had not and that it had a strong right at common law to obtain recovery of its property, and that equity would intervene in support of that right. The respondent submitted that the notice of termination of the lease was given on 17 February 2021, and that was followed by the seven day regime in March 2021, so that it had a strong case for reasonable notice already having been given.

10. The primary judge offered, and the offer is recorded in paragraph 55 of his reasons, to provide the parties with an early final hearing which, I would infer, would extend to that issue. His Honour recorded that both parties declined to accept that course, and it has not been put today that any aspect of his Honour's reasons in that respect were inaccurate.

11. It is inappropriate for the purposes of resolving this application for leave to express a view one way or the other on the strength or weakness of those arguments.

12. Rather, considerations of the balance of convenience are at the forefront of this application. It seems that, to a significant extent, the chattels on the premises which are the subject of this application were pharmaceutical products which, at the time possession was surrendered, had some considerable value, perhaps (although there is no evidence about this before this Court), some small number of hundreds of thousands of dollars. The value of that stock at the end of this year, or at the beginning of next year, may very well be considerably less than that amount. There is no evidence as to the extent to which various pharmaceutical products will reach the end of their sellable lifetime by late 2021 or early 2022.

13. What is clear, though, is that without seeking further interlocutory relief in this Court in support of its application for leave to appeal, Priceline has been able to get by without that stock and other business equipment for some five months, as well as having enjoyed some opportunities to retrieve the stock and equipment in the period after the issue of the notice of termination of lease on 17 February 2021.

14. In determining whether there should be a grant of leave, it is to be borne in mind that the orders which found Priceline's complaint:

1. are interlocutory,

2. were only made necessary after Priceline failed to comply with the regime to which it had consented a week earlier, and

3. will be superseded, as Mr Weinberger acknowledged, when and if final relief is obtained.

15. Further, Priceline seeks damages in the alternative, and so far as may be seen on the materials before this Court, there is nothing to suggest that damages will not be an adequate remedy in the event that it succeeds in establishing its entitlement to its rights at law.

16. For those reasons, this is a most inauspicious vehicle for the grant of leave. I propose that leave to appeal be refused.

17. MCCALLUM JA: I agree with the presiding judge.

18. LEEMING JA: The order of the Court, therefore, will be application for leave to appeal is refused.

[Discussion as to costs]

19. The order of the Court, therefore, will be summons seeking leave to appeal filed 10 May 2021 dismissed, with costs.

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